AT&T On Track For Subscriber Growth

The company is on pace to add subscribers in the third quarter thanks to the rapid adoption of devices such as Apple's iPhone 3GS.

Marin Perez, Contributor

September 18, 2009

2 Min Read

Thanks to the success of the iPhone 3GS, AT&T is on track to add more subscribers in the third quarter than in the previous one, according to comments from AT&T CEO Randall Stephenson.

The company introduced the iPhone 3GS in June and the handset was a success out of the gate, as Apple sold more than 1 million units worldwide in its debut weekend. AT&T reported 1.4 million new subscribers for the second quarter, although the full ramifications of the iPhone 3GS likely weren't felt because it was released just a few weeks before the quarter ended.

"Right now we're on pace in the third quarter to exceed what we did in the second quarter in terms of subscriber adds," Stephenson said during a Goldman Sachs conference Thursday.

This is another indication that Apple's touchscreen smartphone is becoming increasingly important to AT&T's future growth plans, as the majority of its new subscribers are iPhone users. Those users significantly add to AT&T's bottom line because they also are required to have a monthly mobile data plan.

But the iPhone can also be a source of problems for AT&T. The company heavily subsidizes each unit and this could be hurting margins. Additionally, iPhone customers are rapacious data users, and this is taxing AT&T's 3G network which has led to complaints about the carrier's network quality.

Despite any potential downsides, Stephenson said he believes exclusive deals between handset makers and mobile service providers help the industry by fostering and promoting innovation. The company has been the only U.S. carrier to offer the iPhone since 2007, and it is reportedly looking to extend the deal. The Federal Communications Commission is currently probing the wireless industry, and it will be investigating whether exclusive handset deals hamper competition or damage consumer choice.

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